CAGR Calculator India — Compound Annual Growth Rate

Q: What is the difference between CAGR and absolute return?

Absolute return measures the total percentage gain or loss without considering time. CAGR annualises that return to account for the time period. If you invested ₹1,00,000 and it became ₹2,50,000 over 5 years, absolute return is 150% but CAGR is about 20.1%. CAGR is more useful for comparing investments held over different time periods.

Q: When should I use CAGR vs XIRR?

Use CAGR when you have a single lump-sum investment with no additional deposits or withdrawals. Use XIRR when there are multiple cash flows at irregular intervals, such as SIPs, partial redemptions, or additional purchases. For SIP investors, XIRR gives a more accurate picture of actual returns because each instalment has a different holding period.

Q: What is a good CAGR for investments in India?

Historical 10-year benchmarks for India: NIFTY 50 ~12%, NIFTY Next 50 ~14%, Gold (INR) ~10%, Bank FD ~6.5%, PPF ~7.1%. India's CPI inflation averages ~5.5%, so any investment with CAGR below 5.5% is losing purchasing power. For equity mutual funds, a CAGR of 12-15% over 10+ years is considered good.

Q: Does CAGR account for inflation?

No, standard CAGR is a nominal return that does not adjust for inflation. To calculate real CAGR, subtract the inflation rate: Real CAGR ≈ Nominal CAGR − Inflation Rate. For example, 12% nominal CAGR with 5.5% inflation gives approximately 6.5% real CAGR. When comparing investments, always consider real returns.

Calculate the compound annual growth rate of any investment. Enter initial and final values to find your CAGR, project future value at a target growth rate, or compare multiple investments side-by-side against Indian benchmarks like NIFTY 50 (~12%), Gold (~10%), and FD (~6.5%).

Calculate the compound annual growth rate of your investment

Initial investment value

₹

Amount you invested at the beginning

Final investment value

₹

Current or ending value of your investment

Investment period

years

Number of years you held the investment

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How to Use This Calculator

CAGR Calculator tab

Enter your initial investment value, final investment value, and the number of years you held the investment. The calculator computes your Compound Annual Growth Rate (CAGR), absolute return percentage, and total gain in rupees. It also compares your CAGR against benchmarks like NIFTY 50, Gold, and FD.

Reverse CAGR tab

Enter your initial investment, a target CAGR percentage, and the investment period in years. The calculator projects your future value and total gain. Use this to answer questions like "If I invest ₹1 lakh at 15% CAGR for 10 years, how much will I get?"

Compare Investments tab

Enter up to 3 investments with their name, starting value, ending value, and holding period. The calculator ranks them by CAGR and shows how each compares against Indian market benchmarks including NIFTY 50, Gold, FD, PPF, and inflation.

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The Formula

CAGR measures the annualised return of an investment, assuming profits are reinvested and growth is smooth across years:

CAGR Formula:
CAGR = (Ending Value / Beginning Value)^1/n − 1

Where:
Ending Value = Final value of the investment
Beginning Value = Initial amount invested
n = Number of years

Reverse CAGR (Future Value):
FV = PV × (1 + CAGR)ⁿ

Where:
PV = Present value (initial investment)
CAGR = Expected annual growth rate (as decimal)
n = Number of years
FV = Future value

Absolute Return:
Absolute Return = (Final Value − Initial Value) / Initial Value × 100

CAGR is only appropriate for lump-sum investments with no intermediate deposits or withdrawals. For SIPs or irregular cash flows, use XIRR (Extended Internal Rate of Return) instead. CAGR smooths out volatility and shows what a steady annual return would have looked like to produce the same result.

Example

Rahul — Pune IT professional, invested ₹1,00,000 in NIFTY 50 index fund in 2016

Rahul invested ₹1,00,000 as a lump sum in a NIFTY 50 index fund in March 2016 when NIFTY was at ~7,500. By March 2026, with NIFTY at ~23,500, his investment grew to approximately ₹3,13,000.

Step 1: Inputs

Initial investment₹1,00,000

Final value₹3,13,000

Period10 years

Step 2: CAGR calculation

CAGR(3,13,000 / 1,00,000)^(1/10) − 1 = 12.1%

Absolute return213%

Total gain₹2,13,000

Step 3: Benchmark comparison

vs NIFTY 50 (~12%)In line with benchmark

vs FD (~6.5%)5.6% above FD returns

vs Inflation (~5.5%)6.6% real return above inflation

Step 4: Reverse CAGR projection

₹1L at 15% for 10 years₹4,04,556

₹1L at 12% for 20 years₹9,64,629

₹5L at 12% for 10 years₹15,52,924

Rahul's ₹1 lakh investment delivered a 12.1% CAGR over 10 years, closely matching the NIFTY 50 benchmark. His investment more than tripled, significantly outperforming FDs and inflation. If he projects forward at the same rate, his ₹3.13 lakh could grow to ₹9.7 lakh in another 10 years.

FAQ

What is the difference between CAGR and absolute return? ▼

Absolute return measures the total percentage gain or loss without considering time. If you invested ₹1,00,000 and it became ₹2,50,000, your absolute return is 150%. CAGR annualises that return to account for the time period. If that 150% gain happened over 5 years, the CAGR is about 20.1%. Over 10 years, the same 150% absolute return translates to just 9.6% CAGR. CAGR is more useful for comparing investments held over different time periods, while absolute return tells you the total gain.

When should I use CAGR vs XIRR? ▼

Use CAGR when you have a single lump-sum investment with no additional deposits or withdrawals during the period. Examples: a one-time investment in a stock, real estate purchase, or gold bought once. Use XIRR when there are multiple cash flows at irregular intervals, such as SIPs, partial redemptions, additional purchases, or dividend reinvestments. For SIP investors, XIRR gives a more accurate picture of actual returns because each instalment has a different holding period. Most mutual fund platforms in India report XIRR for SIP investments.

What is a good CAGR for investments in India? ▼

A "good" CAGR depends on the asset class and your risk tolerance. Historical 10-year benchmarks for India: NIFTY 50: ~12%, NIFTY Next 50: ~14%, Gold (INR): ~10%, Bank FD: ~6.5%, PPF: ~7.1%. India's CPI inflation averages ~5.5%, so any investment with CAGR below 5.5% is losing purchasing power in real terms. For equity mutual funds, a CAGR of 12-15% over 10+ years is considered good. For debt instruments, beating inflation by 1-2% (i.e., 7-8% CAGR) is reasonable. Real estate in tier-1 cities has delivered 5-8% CAGR, but this excludes rental income.

Does CAGR account for inflation? ▼

No, standard CAGR is a nominal return that does not adjust for inflation. To calculate real CAGR (inflation-adjusted), subtract the inflation rate: Real CAGR ≈ Nominal CAGR − Inflation Rate. For example, if your investment delivered 12% CAGR and India's CPI inflation was 5.5%, your real CAGR is approximately 6.5%. This is your actual increase in purchasing power. When comparing investments over long periods, always consider real returns. An FD giving 6.5% nominal CAGR with 5.5% inflation delivers only ~1% real return.

Can CAGR be negative? ▼

Yes, CAGR is negative when the final value is less than the initial value, meaning the investment has lost money. For example, if you invested ₹1,00,000 and it became ₹70,000 over 3 years, the CAGR is (70,000/1,00,000)^(1/3) − 1 = −11.3%. This means the investment lost 11.3% per year on average. Negative CAGR is common in short-term equity investments during bear markets. Even NIFTY 50 has had negative 3-year CAGR during periods like 2008-2011. This is why long holding periods of 7-10+ years are recommended for equity investments.

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